Record growth, 23 thousand pensioners more in one year, but expenses under control

2023-10-26 08:45:00, Ekonomi CNA

Record growth, 23 thousand pensioners more in one year, but expenses under

The number of people receiving old-age pension reached 491,504 in the first 6 months of 2023, almost 23 thousand more than in the same period of the previous year. Since the end of the year, the scheme was expanded to about 10,000 new pensioners.

These were the highest growth rates in the last two decades. The number of old-age pensions expanded in one year by about 5%, but on the other hand the pension scheme is showing stability. Increased income from contributions and the lower amount of new pensions have improved the deficit of the scheme.

Official data show that in the first six months of the year, the deficit of the pension scheme, which was subsidized by the state budget, was 8 billion ALL from 12 billion in the first six months of 2022, with a decrease of almost 30%. Insurance income in the first 6 months experienced an annual increase of 12%.

In this period, the "baby boom" generation (born in the 1960s-1970s) is retiring, most of whom worked in the transition years and do not meet the conditions for full retirement.

People who retire after 2015, for a medium-term period, benefit from a more moderate increase in the amount of pension, compared to pensioners who retired before this year, due to the change of principle, from joint pension to pension based on contributions.

Record growth, 23 thousand pensioners more in one year, but expenses under

Thus, Albania suffers from high unemployment which means that those who pay insurance are less than those who are reported as employed.

Until 1991, the number of employees in former state enterprises and former agricultural cooperatives, who were also contributors to the social security system, was 1 million 446 thousand. The first beneficiaries of the system began to receive pensions in 1960. According to the statistics of the time, in 1966 there were about 35 thousand beneficiaries, mostly with partial pensions, against 263 thousand contributors. At the end of 1991 the number of beneficiaries had reached 329 thousand, reflecting a dependency ratio of 4.5 contributors for 1 beneficiary, compared to 7.4 contributors for every beneficiary in 1966. While in 2022 there were 1.1 contributors for 1 beneficiary.

The demographic transition is rapidly changing the structure of the population in favor of older ages. Very soon the elderly will be the future generation, but the economic environment and society are not creating the conditions to face the consequences of aging with dignity at the same speed. The third age group, which will soon make up 30 percent of the population, currently lives in poverty and with a lack of prospects for improving financial conditions in the future./ Monitor.al